Gov. Dannel P. Malloy has cultivated a national reputation as a passionate progressive on social issues. From transgender rights and immigration to abortion and criminal justice policy, he has been an enthusiastic ambassador for the Democratic party's liberal wing – and a vocal opponent of President Trump's agenda.

Yet in Connecticut, Malloy is viewed by some labor leaders as a pro-business centrist who has turned his back on two of the core constituencies that make up the Democratic base: workers and the poor. Organized labor twice helped push him into office, but the relationship has grown increasingly frosty and union officials are using unusually harsh language to criticize a Democratic politician they once enthusiastically backed.

"When you have a governor – depending on which day – who says he's progressive and wants to lead the Democratic Governors Association, then he goes after his base of workers on a weekly basis, that is not helpful," said Lori Pelletier, president of the Connecticut AFL-CIO. "He's great when he comes out about immigrants, and he's talking about women, and justice, but when it comes to worker justice, such as earning a decent wage and paying taxes in the community, then it's a different Dan Malloy."

Malloy's differences with labor are nothing like the major battles rust-belt Republican governors have engaged in. Unlike Gov. Scott Walker of Wisconsin or Gov. John Kasich of Ohio, the Connecticut Democrat has backed several key pro-worker initiatives in the past, including a higher minimum wage and paid sick leave.

Organized labor responded by backing Malloy in both 2010 and 2014, the two closest gubernatorial races in more than 50 years. The unions provided armies of volunteers to knock on doors, staff phone banks and run get-out-the-vote operations, giving the Democrat narrow wins over Republican businessman Tom Foley.

Connecticut Governor Dannel P. Malloy announces his state budget proposals on Wednesday at noon at the Capitol building in Hartford. The $20 billion annual budget calls for $1.36 billion in reduced spending and $320 million in new revenue.

Connecticut Governor Dannel P. Malloy announces his state budget proposals on Wednesday at noon at the Capitol building in Hartford. The $20 billion annual budget calls for $1.36 billion in reduced spending and $320 million in new revenue.

But the state's fiscal crisis has severely tested the alliance at a crucial time. The governor is currently in discussions with state employee unions as he seeks $700 million in labor savings in fiscal 2018 and $867 million the following year to help close a $1.7 billion deficit. If the savings are not achieved, Malloy's budget chief Ben Barnes said, 4,200 state employees – about 10 percent of the workforce – could be laid off.

Malloy's spending plan calls for eliminating the property tax credit – popular with middle-income families – and scaling back the earned income tax credit, which benefits the working poor. He is also proposing a sharp increase in the cigarette tax, to $4.35 per pack, which would be on par with New York state for the highest in the country. Advocates for the poor say the cigarette tax hike disproportionately hurts those on the lower end of the income scale.

At the same time, Malloy is pushing for new exemption levels for the estate tax and lowering the lifetime cap, from $20 million to $15 million, changes that would benefit the wealthy. And he is seeking a change in the prevailing wage for municipal construction projects, which union leaders say would lead to lower wages.

Larry Dorman, spokesman for Council 4 of the American Federation of State, County and Municipal Employees, the largest state employee union, said state workers want to be part of the solution. "But one thing that's missing is tax fairness," he said. "That's where the conversation needs to start."

Meg Green, a spokeswoman for the governor, said the budget proposal includes a bold rethinking of the way state aid is doled out that would benefit some of Connecticut's poorest communities. "For too long, we've allowed certain communities to be disproportionately impacted by the state's fiscal challenges, thereby disproportionately impacting taxpayers – many of whom are middle and low income earners," she said. "This budget focuses on correcting this imbalance of burden and directing the state's limited resources to where they are needed most. By creating a system that is more fair, we are working toward ensuring no community needs to levy a mill rate of 35 or higher."

Union leaders say Malloy has increasingly been guided by a pro-business mindset that hurts poor and middle-income residents while protecting hedge fund managers and the super rich. They point to his budget proposal, released Wednesday, as evidence.

"Despite what the governor says, this budget plan does not allow communities to 'lift each other up,'" said Lindsay Farrell, executive director of the Connecticut Working Families Party, a labor-funded group that twice endorsed Malloy. "In reality, it's poor, working and middle class people that will lift up the wealthy by shouldering the larger burden of balancing the budget. Rich people are off the hook."

"Connecticut has the worst income inequality in the entire nation and the governor's budget continues to favor the wealthy elite over ... working families," added Jennifer Schneider, spokeswoman for SEIU District 1199, which represents more than 7,600 state employees. "It's surprising to see a Democratic governor give tax breaks to the wealthy while increasing taxes for working families."

Union officials expressed disappointment at Malloy's approach, saying it is sharply out-of-step with core Democratic values. Pelletier points to the rise of economic populists such as Elizabeth Warren and Bernie Sanders as proof that voters are hungry for politicians who address economic inequality.

"Why Gov. Malloy became this corporate, [Democratic Leadership Conference] Democrat in a state that reveres someone like Dick Blumenthal...is baffling to me," she said. "That's not what Connecticut needs. We don't need to continue protecting the uber-wealthy."

Labor leaders say the governor should resolve the state's budget crisis by raising taxes on the wealthy, not by cutting services and laying off state workers. They support a surcharge on the Connecticut hedge fund industry, which could raise as much as $535 million, and have launched a campaign to win public support for the idea.

"For too long lawmakers have tried to balance Connecticut's budget by cutting important services to the disabled or asking concessions from workers addressing the opioid crisis," Schnieder said in an email. "Connecticut needs to change how these problems are being addressed and this budget is more of the same. Working families need to speak out and let legislators know they no longer accept having the budget balanced on their backs."

But Malloy, who saw a steep decline in his job-approval numbers after enacting the two largest tax increases in state history in 2011 and 2015, now rejects changing the tax rate on income, sales and corporate profits.

At a briefing last week, Barnes, secretary of the Office of Policy and Management, said he's aware that critics on the left are demanding higher taxes on the wealthy and on big business.

"One of the criticisms ... we will hear ... is that we are punishing X, Y, and Z – you can name whichever constituencies you like that don't do well under this budget but we're not taxing the rich and taxing big corporations," Barnes said.

While acknowledging that progressives seeking such an approach have "a legitimate argument," Barnes said such an approach could hurt the state's long-term fiscal health.

"One of the things that's really driving the difficulties we're facing right now is an extraordinary slow-growing economy," Barnes said. "The lesson of 2015 is that the easy answer of going to taxes on corporations and on business has significant negative repercussions for the state as well."

Pelletier disputes the characterization that the budget proposal avoids new taxes. "There are taxes on the table that are going to impact the poor, workers, those that need help the most," she said.

While labor leaders were roundly critical of Malloy's approach, the business community offered a tentative endorsement. "Closing a multibillion dollar budget gap without ... broad-based tax increases ... sends a good message," said Joe Brennan, CEO of the Connecticut Business and Industry Association, the state's largest business lobbying group. "There's a number of positive steps in this proposal that our members will respond to well."